Supply chain management is the unsung hero of the manufacturing sector. It’s not glamourous – there’s nothing tangible to validate your efforts – but it’s the foundation that supports every manufacturing business. A seamless supply chain improves inventory management, keeps waste to a minimum and frees up capital that would otherwise be tied up in stock – so it’s worth getting right! However, supply chain management doesn’t happen in isolation, it is built on the foundation of key business processes. Looking at some of these key processes, we can see how a best-of-breed ERP system such as SYSPRO offers a platform for Supply Chain Integration:
Customer Relationship Management – creates a structure for developing and maintaining relationships with customers. Individual customers or groups are identified, based on their value over time, and their loyalty can be enhanced by providing tailored products and services. Cross-functional customer teams develop Product and Service Agreements (PSA) to meet the needs of key accounts and for segments of other customers. They also work with key customers to improve processes and eliminate demand variability and non-value added activities. Performance reports are designed to measure the profitability of individual customers as well as the financial impact on the customer.
The SYSPRO software solution enables companies to collect, maintain and manipulate a rich, customer-related database to promote increasing revenue and profitability. Our Sales and Distribution solutions and SYSPRO Reporting also support the CRM process.
Supplier relationship management – defines how a company interacts with its suppliers. As in the case of customer relationship management, a company will form close relationships with some of its suppliers, while others are less closely cultivated. Good supplier relationship management involves devising the right PSAs and managing them well, so that the company and its suppliers continue to benefit from the most favourable trading arrangements.
Customer service management – operates at the customer interface. It provides the key point of contact for administering the PSA and can give the customer information on orders, shipping dates and product availability. SYSPRO ERP manufacturing and logistics modules supply the data required by customer service management.
Demand management – allows a company to be proactive in matching supply to demand. The process includes forecasting and synchronization of supply and demand, in order to increase flexibility and reduce demand variability. The process should employ customer intelligence, historical sales information and planned marketing efforts to forecast and influence demand.
The order fulfilment – process involves more than just filling orders. It includes all activities necessary to define customer requirement and to design a process that allows a company to meet customer requests, while minimising the total delivered cost. This is not just the logistics function, but instead needs to be implemented cross-functionally and with the coordination of key suppliers and customers. The objective is to develop a seamless process from the supplier to the organisation and to its various customer segments.
Manufacturing flow management – includes all the activities necessary to move goods through production and to obtain, implement and manage manufacturing flexibility in the supply chain. Manufacturing flexibility reflects the ability to make a wide variety of products at an appropriate rate and at lowest possible cost. To achieve the desired level of manufacturing flexibility, planning and execution must extend beyond the production site to encompass the entire supply chain.
Clearly, managing manufacturing flow requires an element of manpower planning. In the case of SYSPRO, our Equator HR module integrates with the ERP system to facilitate this planning.
Product development and commercialisation – provides the structure for developing and bringing products to market in unison with customers and suppliers. The product development and commercialisation process team must coordinate with customer relationship management to identify customer articulated and unarticulated needs; select materials and suppliers in conjunction with the supplier relationship management process; and develop production technology in manufacturing flow to manufacture and integrate into the best supply chain flow for a given product/market combination.
Returns management – is the SCM process by which activities associated with product returns, reverse logistics, gatekeeping, and avoidance are managed within the firm and across key members of the supply chain. The correct implementation of this process enables management not only to manage the reverse product flow efficiently, but to identify opportunities to reduce unwanted returns and to control reusable assets such as containers. Effective returns management is an important link between marketing and logistics, offering an opportunity for competitive advantage.